Secureworks sees 200% ARR increase, record customer growth
Secureworks has revealed 200% Taegis annual recurring revenue (ARR) growth and record customer growth in its fourth quarter and full fiscal year 2022 results.
The cybersecurity company announced its results for the period ending January 28, 2022.
Key highlights of the results include Secureworks Taegis growing to $165 million in ARR, an increase of 34% sequentially and 200% on a year-over-year basis.
Furthermore, Taegis added 400 customers in the fourth quarter of fiscal 2022, which Secureworks says is a record for its customer growth and meant it finished the year with a total of 1,200 customers using the Taegis cloud-native security platform.
Both GAAP and Non-GAAP quarterly gross margins also rose to record highs, at 60.5% and 64.1%.
"With the first true XDR solution, Secureworks Taegis has one of the fastest XDR customer and ARR growth rates in the market due to the superior outcomes and ROIs we're delivering customers," Secureworks CEO Wendy Thomas says.
"Just two and a half years after launch, Taegis reached $165 million in ARR, a remarkable accomplishment."
Highlights for Secureworks's fourth quarter fiscal 2022 include:
- Taegis revenue grew 156% from the fourth quarter of fiscal 2021 to $29.2 million.
- Overall revenue was $127.9 million, a decrease of 8.5% from the fourth quarter of fiscal 2021.
- GAAP gross profit was $77.3 million, compared with $80.0 million in the fourth quarter of fiscal 2021.
- Non-GAAP gross profit was $81.9 million, from $84.2 million in the same period last year.
- GAAP gross margin was 60.5%, compared with 57.2% in the same period last year.
- Non-GAAP gross margin was 64.1% compared with 60.2% in the fourth quarter of fiscal 2021.
- GAAP net loss was $8.8 million, or $0.11 per share, compared with $9.5 million, or $0.12 per share, in the prior year.
- Non-GAAP net income was $2.6 million, or $0.03 per share, compared with $0.3 million, or breakeven per share, in the same period last year.
- Adjusted EBITDA for the quarter was $2.1 million, compared with $3.2 million in the fourth quarter of fiscal 2021.
- Ended the fourth quarter with a record $221 million in cash and cash equivalents.
Secureworks's full year fiscal 2022 results include:
- Taegis revenue in fiscal 2022 grew 167% to $85.6 million from $32.1 million in fiscal 2021.
- Overall fiscal 2022 revenue was $535.2 million, a decrease of 4.6% from fiscal 2021 revenue of $561.0 million.
- GAAP gross profit was $318.1 million, compared with $318.9 million in full year fiscal 2021.
- Non-GAAP gross profit increased to $335.3 million from $334.8 million for fiscal 2021.
- Full year fiscal 2022 GAAP gross margin was 59.4%, compared with 56.8% for full year fiscal 2021.
- Non-GAAP gross margin was 62.6% for fiscal 2022, compared with 59.7% for the prior fiscal year.
- GAAP net loss was $39.8 million, or $0.48 per share, compared with $21.9 million, or $0.27 per share, for the prior fiscal year.
- Non-GAAP net income was $8.7 million, or $0.11 per share, compared with net income of $17.9 million, or $0.22 per share, for the prior fiscal year.
- Adjusted EBITDA for the full year was $18.6 million, compared with $33.2 million for full year fiscal 2021.
"We're pleased with the continued expansion of our Taegis customer base, resulting in Taegis ARR growth of 200% year over year," Secureworks CFO Paul Parrish says.
"As we actively shift the company to a higher-margin mix of solutions, full year GAAP subscription gross profit margins are expanding, up 270 bps over the prior full fiscal year."
Secureworks also saw some business and operational improvements, such as a continued expansion of the scope of its detection capabilities with the addition of 2,090 countermeasures added to Taegis, including the launch of its patent-pending Hands on Keyboard detector.
In addition, the company received several awards, including Frost - Sullivan's 2021 Company of the Year Award in the North American Managed and Professional Security Services Market and Frost - Sullivan's 2021 Customer Value Leadership Award.
Secureworks also won Gold in the 2022 Cybersecurity Excellence Awards for Best Managed Detection and Response Solution.
Moreover, the company was recognised as an experienced XDR provider in Forrester's New Tech: Extended Detection and Response (XDR) Providers, Q3 2021, a Leader in the Forrester Wave: Managed Detection and Response, and a Leader in the IDC MarketScape for both the US Managed Detection and Response Services 2021 Assessment, and Worldwide Incident Readiness Services 2021.
Additional accolades include winning Security Current's inaugural CISO Choice Award for Security Analytics and winning CyberSecurity Breakthrough's Cloud-based Network Security Solution of the Year Award.
Secureworks also joined CISA's Joint Cyber Defense Collaborative (JCDC) as a Strategic Alliance Partner, a move that the company says supports its mission to contribute to the broader security community and help protect US national critical infrastructure.